Thursday, May 16, 2024

Your Smart TV Knows What You’re Watching

 

Here’s how to turn off “automated content recognition,” the Shazam-like software on smart TVs that tracks what you’re watching

If you bought a new smart TV during any of the holiday sales, there’s likely to be an uninvited guest watching along with you. The most popular smart TVs sold today use automatic content recognition (ACR), a kind of ad surveillance technology that collects data on everything you view and sends it to a proprietary database to identify what you’re watching and serve you highly targeted ads. The software is largely hidden from view, and it’s complicated to opt out. Many consumers aren’t aware of ACR, let alone that it’s active on their shiny new TVs. If that’s you, and you’d like to turn it off, we’re going to show you how.

First, a quick primer on the tech: ACR identifies what’s displayed on your television, including content served through a cable TV box, streaming service, or game console, by continuously grabbing screenshots and comparing them to a massive database of media and advertisements. Think of it as a Shazam-like service constantly running in the background while your TV is on.

These TVs can capture and identify 7,200 images per hour, or approximately two every second. The data is then used for content recommendations and ad targeting, which is a huge business; advertisers spent an estimated $18.6 billion on smart TV ads in 2022, according to market research firm eMarketer. 

For anyone who’d rather not have ACR looking over their shoulder while they watch, we’ve put together a guide to turning it off on three of the most popular smart TV software platforms in use last year. Depending on the platform, turning off ACR took us between 10 and 37 clicks.

We recommend updating to the latest version of your TV’s software to ensure instructions are accurate.

Roku

Samsung

LG 

If you recently purchased a new smart TV with ACR that is not on this list, email me at mohamed@themarkup.org. I’m also interested in learning more about readers’ experiences with privacy and advertising on smart TVs.

By Mohamed Al Elew and Gabriel Hongsdusit

Original Post

Thursday, May 2, 2024

Home prices are poised to jump another 5% this year as the market is even tighter than it was in 2023, economist says

Home prices could see another 5% surge in 2024, Capital Economics predicted.

The research firm pointed to home inventory levels, which are still near historic lows.

Low inventory has helped push home prices higher over the last year as demand remains hot.

Home prices could continue to climb this year, as the housing market isn't nearly as loose as prospective homebuyers may think, according to Capital Economics. 

The research firm pointed to the recent uptick in housing inventory, with new listings on the market up 16% compared to levels last year. That's renewed some hope that home prices will eventually come down, or slow their pace of increases, but housing affordability is unlikely to improve, the firm said, forecasting another 5% surge in home prices this year. 

While new listings show a greater number of homes hitting the market, active listings are still around 400,000 short of "normal" levels, Capital Economics estimated, which suggests that an imbalance of supply and demand is still weighing on affordability.

Mortgage rates also remain elevated, with the 30-year fixed rate clocking in at 6.8% the last week, according to Freddie Mac data. High rates have discouraged existing homeowners from listing their properties for sale — and the negative effect that has on inventory will likely continue, Capital Economics said, given that mortgage rates are only expected to ease to around 6.5% by the end of the year. 

"We think that reports of a wave of new resale supply coming onto the market are overblown. While the number of homes being listed for sale has increased compared to last year, it is still low by historical standards, as mortgage rate 'lock-in' continues to curb the number of homes put up for sale. That supports our upbeat call on house prices this year," Thomas Ryan, the firm's property economist, said in a note on Tuesday.

If anything, the housing market looks even "tighter" than it was a year ago, Ryan added. While inventory remains in short supply, the demand for homes has grown hotter, with houses on the market selling three days faster on average than last year, according to Realtor.com data.

Home prices jumped 5.5% in 2023, thanks to a combination of high mortgage rates and low inventory levels. As of February 2024, home prices were already up 6.4% from levels recorded last year, with the median sales price of a home clocking in at over $412,000, according to Redfin. 

"Ultimately the key to a full recovery in existing homes is much lower mortgage rates," Ryan said. "That tight supply paired with a recovery in buyer demand should keep competition for homes strong and support prices."

Other real estate economists have warned housing affordability won't significantly improve for at least the next few years. That's because it will take time to build enough inventory for supply and demand to balance out, experts told Business Insider.

By Jennifer Sor

Original Post

Fed leaves rates unchanged, flags 'lack of further progress' on inflation

WASHINGTON, May 1 (Reuters) - The U.S. Federal Reserve held interest rates steady on Wednesday and signaled it is still leaning towards eventual reductions in borrowing costs, but put a red flag on recent disappointing inflation readings that could make those rate cuts a while in coming.

Indeed, Fed Chair Jerome Powell said that after starting 2024 with three months of faster-than-expected price increases, it "will take longer than previously expected" for policymakers to become comfortable that inflation will resume the decline towards 2% that had cheered them through much of last year.

That steady progress has stalled for now, and while Powell said rate increases remained unlikely, he set the stage for a potentially extended hold of the benchmark policy rate in the 5.25%-5.50% range that has been in place since July.

U.S. central bankers still believe the current policy rate is putting enough pressure on economic activity to bring inflation under control, Powell said, and they would be content to wait as long as needed for that to become apparent - even if inflation is simply "moving sideways" in the meantime.

The Fed's preferred inflation measure - the personal consumption expenditures price index - increased at a 2.7% annual rate in March, an acceleration from the prior month.

"Inflation is still too high," Powell said in a press conference after the end of the Federal Open Market Committee's two-day policy meeting. "Further progress in bringing it down is not assured and the path forward is uncertain."

Powell said his forecast remained for inflation to fall over the course of the year, but that "my confidence in that is lower than it was."

Whether there are rate cuts this year or not remains in doubt.

"If we did have a path where inflation proves more persistent than expected, and where the labor market remains strong but inflation is moving sideways and we're not gaining greater confidence, well, that would be a case in which it could be appropriate to hold off on rate cuts," Powell said. "There are paths to not cutting and there are paths to cutting. It's really going to depend on the data."

Despite the uncertainty of the current economic moment, Powell's characterization of rate hikes as "unlikely" cheered investors concerned about a newly hawkish Fed chief.

U.S. stock and bond prices turned higher as Powell preached patience that may delay rate cuts, but also means a high bar for any more hikes. The Fed raised its benchmark policy rate by 5.25 percentage points in 2022 and 2023 to curb a surge in inflation.

Powell's remarks on Wednesday were "notably less hawkish than many feared," said analysts at Evercore ISI. "The basic message was that cuts have been delayed, not derailed."

Investors in contracts tied to the Fed's policy rate increased bets that rate cuts could begin in September rather than later in the year as reflected in earlier market pricing.

BALANCE SHEET

The Fed's latest policy statement kept key elements of its economic assessment and policy guidance intact, noting that "inflation has eased" over the past year, and framing its discussion of interest rates around the conditions under which borrowing costs can be lowered.

"The Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably towards 2%," the Fed repeated in its unanimously-approved statement.

That continues to leave the timing of any rate cut in doubt, and Fed officials made emphatic their concern that the first months of 2024 have done little to help the cause.

"In recent months, there has been a lack of further progress towards the Committee's 2% inflation objective," the Fed said in its statement.

The U.S. central bank also announced it will scale back the pace at which it is shrinking its balance sheet starting on June 1, allowing only $25 billion in Treasury bonds to run off each month versus the current $60 billion. Mortgage-backed securities will continue to run off by up to $35 billion monthly.

The step is meant to ensure the financial system does not run short of reserves, as happened in 2019 during the Fed's last round of "quantitative tightening."

While the move could loosen financial conditions at the margin at a time when the U.S. central bank is trying to keep pressure on the economy, policymakers insist their balance sheet and interest rate tools serve different ends.

The Fed maintained its overall assessment of economic growth, saying that the economy "continued to expand at a solid pace. Job gains have remained strong and the unemployment rate has remained low."

Powell reconciled that with the relatively weak, 1.6% growth of gross domestic product in the first quarter by saying that the 3.1% increase in private domestic demand was a better gauge of where the economy stands, with output buttressed by a recent jump in immigration.

Asked about the risk the U.S. was entering a period of "stagflation" with stagnant growth and rising prices, Powell said current conditions are nothing like those seen in the late 1970s when prices were rising more than 10% annually at one point alongside high unemployment.

"Right now we have ... pretty solid growth ... We have inflation running under 3%," Powell said. "I don't see the 'stag' and I don't see the 'flation.'"

By Howard Schneider and Ann Saphir

Original Post

A Guide To Creating A Profitable Rental Property

 

If you’re looking to invest in residential real estate to rent out a property, there are many things you can do to contribute to its profitability. Some of them cost more than others, but keeping these things in mind when buying, renovating and decorating your property could make you a lot more money in the long run. Your priorities when it comes to the property will differ depending on your target market, yet these are pretty standard ways to help you get started!

Location

Before you jump into buying a property, it is essential that you research the area you are wanting to purchase a house in. You must consider potential deterrents such as high crime rates, loud areas and a generally messy environment. Equally, you should look out for selling points, such as good school districts, public transport and close amenities. The things that you prioritise will differ depending on your target audience, for example if you are wanting to target young professionals with a city flat, you would look out for public transport and amenities rather than good school districts. Decide who you want to attract to the property, consider what they would look for and research areas in depth accordingly. 

Make It Energy Efficient

Now that you’ve decided on a location, renovations are likely to begin. One thing that can dramatically increase the profitability of a rental property is if it is energy efficient. Prospective renters are sure to ask for the energy efficiency rating, perhaps because they are eco-friendly or more likely because they want to keep the cost of their bills to a minimum. Having double glazed windows, loft insulation and low pressure taps and shower heads will make a massive difference when it comes to the monthly cost of bills. The best thing to do is to upgrade the boiler to one that is A-rated, as heating accounts for about half of the average energy bill. Being able to tell potential renters about the implementation of various energy-saving elements during renovation will impress them. Best of all, your monthly yield will increase as you are able to charge more monthly rent for a property that will save the tenants money. 

Neutral Colour Palette

After any main renovations have taken place, you may start to consider decorating. There are no strict rules here, however in order to make your property as profitable as possible, it is advisable to keep the colour palette neutral. If the walls, floors and fixtures are mismatched throughout the house, it will completely put off most potential renters. So, going for cream walls and wooden floors throughout the house is your best option. When it comes to fixtures such as your bathroom suite and kitchen, keep things simple again. A white bathroom suite with grey tiles and cream kitchen cupboards with a wooden countertop is the best way to go. Not only will the property look bright and clean, but it will also enable your tenants to make the place feel like home as they can bring in their own sense of style. For an added tip, install some hooks or screws into any large blank walls to enable them to easily hang wall art. 

Cohesive Furniture

Not everyone decides to, but furnishing your property is a great option for many rental properties. Again, it is important to consider who you are targeting here. If you are wanting a family to rent the property, it is likely they will have already built up a collection of their own furniture. However, for city centre flats, opting for a furnished finish will be extremely popular. There is no need to buy designer furniture or expensive soft furnishings, you just need to buy items that complement the existing colour palette and look neat. Choose a colour scheme, either white or light wood works well, and choose furniture that all matches. Something as simple as having a dining table, tv stand and coffee table that all match can completely change the overall look of a room. Don’t opt for a cream sofa, instead a mushroom brown sofa or soft grey will look great and will be easier to maintain. 

Summary

Considering the wants and needs of your potential renters should definitely not be an afterthought when it comes to buying a property. Instead, you should take time to consider what they might be looking for, and what they will find appealing, throughout the entire process. The smallest decisions could make your property much more profitable, so investing a bit more from the beginning is a good idea in order to increase your monthly yield. 

WRITTEN BY DAISY MOSS

Original Post

Freddie Mac Launches DPA One: A Game-Changer for Home Buyers Seeking Down Payment Help

 A down payment assistance assistant 

In an effort to support aspiring homeowners and simplify the process of accessing down payment assistance programs, Freddie Mac launched a groundbreaking online resource called “DPA One”.

This innovative initiative is designed to help borrowers overcome one of the biggest hurdles to homeownership – the down payment. By streamlining the search for down payment assistance, DPA One aims to empower more individuals to achieve their dreams of owning a home.

Making homeownership within reach

DPA One serves as a user-friendly and comprehensive platform that connects potential home buyers with down payment assistance programs across the country.

With a mission to broaden access to affordable lending and promote equitable housing finance, Freddie Mac’s DPA One initiative opens doors to homeownership by providing a centralized hub that offers essential information about down payment assistance.

Finding the right down payment assistance program

DPA One is an invaluable tool for borrowers looking to navigate the often complex landscape of down payment assistance programs.

The platform consolidates information from 395 programs offered by 227 providers, covering nearly all states and the District of Columbia. This inclusive collection ensures that borrowers across the nation can find suitable options tailored to their unique needs and local regulations.

Time to make a move? Let us find the right mortgage for you 

Simplifying the search process

By registering on the DPA One platform, potential home buyers gain access to an extensive database of down payment assistance programs, making it easier than ever to find the assistance they require.

The platform offers a streamlined search functionality, allowing borrowers to quickly identify relevant programs based on their location, eligibility criteria, and other key factors. DPA One significantly reduces the time and effort needed to find the most suitable down payment assistance options.

The bottom line

With the launch of DPA One, Freddie Mac took a bold step towards simplifying the process of accessing down payment assistance programs.

By utilizing this innovative online resource, potential home buyers can explore a multitude of down payment assistance options tailored to their specific needs, ultimately bringing the dream of homeownership within reach.

Ready to begin your home-buying journey today? Get preapproved and compare rates to find the best fit for your financial situation. Your dream home could be just a few clicks away!

By:Aleksandra Kadzielawski Reviewed By: Paul Centopani

Original Post

Fannie Mae Introduces 5% Down Payment Option for Multifamily Homes

Lowered down payment requirements for multifamily homes

As you may already know, last November, Fannie Mae made a notable policy change. Effective from the weekend after November 18, 2023, it began accepting 5% down payments for owner-occupied 2-, 3-, and 4-unit homes. This marked a departure from the previous multifamily financing requirement of 15-25% down payments for duplexes, triplexes, and fourplexes.

This new option presents a great opportunity for individuals looking to invest in multifamily homes while also enjoying the benefits of homeownership. Prospective owner-landlords can now afford these properties more easily, thanks to the reduced down payment requirement by Fannie Mae.

Expanded financing choices and easier approvals for multifamily homes

The policy change applies to standard purchases, no-cash-out refinances, HomeReady, and HomeStyle Renovation loans for owner-occupied transactions. This means that first-time buyers and individuals seeking to offset high mortgage payments can take advantage of Fannie Mae’s more accessible financing options.

The maximum loan amount allowed for these 2-4 unit properties is set at $1,396,800, ensuring that larger and more expensive properties can be purchased with flexibility. Additionally, the elimination of the FHA self-sufficiency test for 3-4 unit properties means that buyers will face fewer hurdles when seeking pre-approval for these types of multifamily homes.

Taking advantage of Fannie Mae’s policy change

Mortgage loan borrowers interested in taking advantage of this opportunity can apply now, as the changes are already in place within Fannie Mae’s system since November 18, 2023. Now that the new policy is live, potential buyers should take immediate action, ensuring all essential documentation is in order.

For owner-occupant landlords, this policy shift represents a significant opportunity to reduce mortgage payments by leveraging rental income. The ability to make a smaller down payment not only makes multifamily homes more accessible, but it also allows home buyers to gain valuable landlord experience, as they have the opportunity to collect rent from other units while simultaneously building equity in their own property.

Fannie Mae’s move to lower the down payment requirements for multifamily homes is a promising step towards improving access to credit and affordable rental housing. With this progressive policy change, the dream of owning a multifamily home while generating rental income is becoming more attainable for mortgage loan borrowers.

Time to make a move? Let us find the right mortgage for you!

By Aleksandra Kadzielawski

Original Post

Monday, March 25, 2024

Popular Video Doorbells Have Major Security Flaws

 

Your trendy video doorbell could invite more than just guests, according to Consumer Reports.

A popular type of video doorbell has major security flaws that can allow hackers to spy on homeowners who use the technology, according to recent testing by Consumer Reports.

Test engineers at the publication were able to hack doorbells made by the manufacturer Eken and sold under various brands. They also found issues with doorbells sold under the brand Tuck.

In addition, the doorbells do not have a visible ID issued by the Federal Communications Commission. Technically, that makes it illegal to distribute them in the U.S., according to CR.

Thousands of this brand of video doorbell are sold each month at Amazon, Walmart, Shein, Temu and other marketplaces, CR says.

Eken has responded to CR’s findings by saying it will add the ID, which will be available on new doorbells within about a month. It also said it was addressing CR’s other findings.

CR says it also reached out to Tuck and Amazon but did not receive a response.

However, CR is sounding a warning about the products, saying they are “just a drop in the flood of cheap, insecure electronics from Chinese manufacturers being sold in the U.S.”

In the article about the findings, Justin Brookman, director of technology policy for CR, says:

“Big e-commerce platforms like Amazon need to take more responsibility for the harms generated by the products they sell. There is more they could be doing to vet sellers and respond to complaints. Instead, it seems like they’re coasting on their reputation and saddling unknowing consumers with broken products.”

If you are worried about your video doorbell’s security status, CR recommends disconnecting it from your home Wi-Fi and removing it from your door. CR says other video doorbells offer “much better security,” including those sold under the following brands:

  • Logitech
  • SimpliSafe
  • Ring

BY: Chris Kissell

Original Post

Wednesday, March 20, 2024

The 20-5-3 Nature Prescription: How Much Time Should You Be Outside?

 

STORY AT-A-GLANCE

  • The 20-5-3 nature prescription describes how much time you spend outdoors to be happy and healthy
  • At the bottom of the pyramid is 20 minutes: This is the amount of time you should aim to spend outdoors three times a week to boost memory, cognitive function and well-being
  • The next part of the 20-5-3 rule refers to five hours — the length of time you strive to spend in semi-wild nature each month
  • The final part of the 20-5-3 nature prescription describes three days — the number you should spend every year in remote areas of the natural world
  • Spending time outdoors may put your brain into “soft fascination” mode, which has meditation-like benefits

It’s no secret that spending time in nature is good for your mind and body. Humans are designed to be connected to their natural environment, and when this connection is severed, as is so common in the modern world, physical, emotional and mental health suffers.

I’ve long recommended spending time outdoors daily to reap the benefits of sensible sun exposure. But even beyond sunlight, the natural world offers a place for humans to destress and connect in ways that don’t occur inside of four walls.

Michael Easter, professor at the University of Nevada, Las Vegas, and author of "The Comfort Crisis: Embrace Discomfort to Reclaim Your Wild, Happy, Healthy Self," described his time spent in the Alaskan wilderness as "transcendent."1 Yet, Americans may spend up to 92% of their time inside,2 missing out on key benefits.

Still, the advice to "spend time outdoors" is ambiguous, leaving many to wonder how much time in nature is necessary for optimal health and well-being. The 20-5-3 nature pyramid may provide some clarity.

20 Minutes in Nature, Three Times a Week

Rachel Hopman, Ph.D., a neuroscientist at Northeastern University, told Easter about the nature pyramid — a simple guideline for the amount of time you should spend in nature. At the bottom of the pyramid is 20 minutes. This is the amount of time you should aim to spend outdoors three times a week to boost memory, cognitive function and well-being.3 It may also lower levels of the stress hormone cortisol.

It’s important to note that walking while using a cellphone did not lead to the same beneficial effects. However, simply going for a walk outside may put your brain into "soft fascination" mode, which has meditation-like benefits. Easter wrote:

"In nature, our brains enter a mode called 'soft fascination.' Hopman described it as a mindfulness-like state that restores and builds the resources you need to think, create, process information, and execute tasks. It’s mindfulness without the meditation.

A short daily nature walk — or even a walk down a tree-lined street — is a great option for people who aren’t keen on sitting and focusing on their breath. But turn off your phone — alerts from it can kick you out of soft-fascination mode."

Other research by Hopman and colleagues found spending time in natural environments, like parks or forests, can make you feel better and think clearer. When you focus on something, your brain uses up energy, like a battery running out of power. But nature is different — it gives your brain a break because you don't have to try so hard to pay attention to it. Hopman’s study looked at brain waves of 29 people before, during and after spending time in nature.5

They found that a specific type of brain wave, called posterior alpha power, was lower when people were in nature compared to when they were not. This suggests that changes in this brain wave might help explain how being in nature affects our brains.

Five Hours in Semi-Wild Nature Each Month

The next part of the 20-5-3 rule refers to five hours — the length of time you strive to spend in semi-wild nature each month. It’s not only the hours spent that are important but also the environment. Look for a natural area such as a state park, which gives you access to a wilder space — more so than you’d find in your average city park.

Part of the relaxation humans feel when immersed in nature may come from viewing fractals. "Fractals are patterns that repeat at increasingly fine sizes and so create shapes of rich visual complexity. Prevalent in nature, clouds, trees and mountains are common examples, as are cauliflowers and fern leaves," according to research published in Urban Science.6

Fractals are like repeating patterns, but they look a bit different each time they repeat. Most studies on how people react to fractals have used ones that mimic the patterns we see in nature, rather than ones that repeat exactly at different sizes. Researchers wondered: Do we feel better because of any kind of fractal, or specifically because of the ones found in nature?

To find out, a study looked at both types of fractals — the ones that mimic nature and the ones that repeat exactly — and gradually changed one into the other.7 They showed these patterns to 35 people while measuring their brain activity. The results revealed that people responded differently to the two types of fractals — and the ones that looked like natural patterns were better at helping people feel relaxed and focused.

"Cities don’t have fractals," Hopman told Easter. "Imagine a typical building. It’s usually flat, with right angles. It’s painted some dull color."

Three Days in the Wild Every Year

The final part of the 20-5-3 nature prescription describes three days — the number you should spend every year in remote areas of the natural world. Easter explains:9

"This is the top of the pyramid. Three is the number of days you should spend each year off the grid in nature, camping or renting a cabin (with friends or solo). Think: places characterized by spotty cell reception and wild animals, away from the hustle and bustle.

This dose of the wildest nature is sort of like an extended meditation retreat … It causes your brain to ride alpha waves, the same waves that increase during meditation or when you lapse into a flow state. They can reset your thinking, boost creativity, tame burnout, and just make you feel better."

Indeed, after a week spent river-rafting, the participants in one study reported an average 29% decrease in post-traumatic stress disorder (PTSD) symptoms and a 21% decrease in general stress, along with improvements in social relationships, life satisfaction and happiness.10,11 The researchers attributed the benefits to the feelings of awe experienced when in the natural world. Easter described similar emotions after time spent in the wild:12

"I experienced savage weather, crossed raging rivers, and faced a half-ton grizzly. My brain was feeling less hunkered down in its typical foxhole — a state I’d compare to that of a roadrunner on meth, dementedly zooming from one thing to the next. My mind felt more like it belonged to a monk after a month at a meditation retreat. I just felt … better.

The biologist E.O. Wilson put what I was feeling this way: 'Nature holds the key to our aesthetic, intellectual, cognitive, and even spiritual satisfaction.'"

Not Enough Time in Nature Poses Health Risks

Urbanized lifestyles, characterized by limited access to natural spaces, extensive screen time and heightened work and academic pressures, contribute to an increase in nature deficits. This trend results in a reduction in outdoor leisure time and a greater amount of time spent indoors.

Journalist Richard Louv, in his book "Last Child in the Woods," coined the term "nature deficit disorder" to describe this phenomenon.13 Although not a formal psychological diagnosis, it highlights how nature deficiency is linked to adverse psychological and physical health outcomes. Louv contends that human disconnection from nature leads to diminished sensory engagement, attention difficulties and elevated rates of both physical and emotional ailments.

Time outdoors is so fundamental to human life that even in U.S. maximum security prisons, inmates are guaranteed two hours outdoors each day. Yet, according to one survey, 50% of children spend less than one hour outside daily.14 It’s further noted in Proceedings of the Royal Society B:15

"Humans in developed countries spend much of their time indoors and in urban landscapes that bear little resemblance to the environment in which our species evolved. For example, a large survey based in the USA suggested that a typical citizen spends 87% of their time indoors and an additional 6% of their time in vehicles.

Living almost entirely apart from nature can lead to an overall disconnection from nature that has negative consequences for environmental conservation and can deprive individuals of the health and well-being benefits that nature provides."

Spending Time in Green and Blue Spaces Is Good for You

Varying the time you spend in natural environments among green spaces — like forests and parks — or blue spaces, like rivers, lakes and coastal areas, also provides significant benefits to overall well-being. There is a growing recognition of the importance of both green and blue spaces.

While green and blue spaces share some characteristics such as cooling effects and exposure to biodiversity, they also offer unique experiences. Blue spaces, for example, provide opportunities for recreational activities like swimming and offer distinct soundscapes such as the sounds of water, unlike green spaces.

A team of researchers, analyzing data from 18 countries, found that the greatest mental health benefits may stem from exposure to various types of natural environments. Visiting green spaces, inland blue spaces or coastal blue spaces within the past four weeks was positively associated with well-being and inversely associated with mental distress.

Feeling psychologically connected to nature, known as nature connectedness, was similarly linked to mental well-being and was associated with a lower likelihood of using depression medication.16 In separate studies, it was observed that older adults with access to parks exhibited better physical and psychological health, while individuals who frequented blue spaces also reported improved health.17

Another variable is exposure to specific sites and sounds in the natural world, like birds and their songs. It turns out these sweet melodies may yield lasting mental health benefits, according to research from the Institute of Psychiatry, Psychology & Neuroscience (IoPPN) at King’s College London.18

The study took place between April 2018 and October 2021. It involved 1,292 participants primarily from the U.K., the European Union and the U.S. A cellphone app called Urban Mind was used to collect real-time reports of participants’ mood and environment.

Significant improvements were reported in the mental well-being of people with and without depression upon seeing a bird or hearing birdsongs compared to not seeing or hearing a bird.19 The positive benefits to mood lasted until the next app message, or up to eight hours.20

Why I Disagree With This Recommendation

I view the 20-5-3 nature rule as a feeble attempt to identify the minimum requirement of being outdoors in the sun. I realize that many, even at this astonishing low level, still fail to achieve this recommendation. This is a devastatingly sad commentary on just how unhealthy our behavior has become.

Getting regular daily sun exposure has been a passion of mine for several decades. There are many benefits to this activity that was engaged in by virtually every one of our ancient ancestors. It was virtually impossible to violate this because the daily necessities of living forced nearly everyone to experience daily sun exposure, not 20 minutes three times a week.

Even up to the turn of the twentieth century the most common occupation in the US was that of farmer who is outside most of the day. Today virtually all of us have indoor jobs. So, even if we live at a latitude where healthy sun exposure is possible, most fail to go outdoors and are stuck inside all day long.

I strongly believe that most of us should strive to be outdoors for an hour a day. Ideally that hour should be around solar noon to achieve the benefits of UVB and near IR wavelengths that, not only increase vitamin D, but additionally increase a storage form of energy known as structured water that can power your body when you don't have sun exposure.

Analysis by Dr. Joseph Mercola

Original Post

Wednesday, March 13, 2024

What’s the TRUE COST?

 

When you talk options, be sure your clients know the true cost of their choices. I have had a number of conversations recently where my clients have won deals because they put the client in a position to succeed by sharing the true cost of their choices. We spoke a few months ago as we approached the end of the year and I suggested you drive the conversation around getting into a home prior to the beginning of the year, and the increase in demand that often creates. Some shared, others didn’t. Those that did are seeing their clients in homes that they secured at prices that are significantly lower than they would be right now, as well as the cost of that home a few more months from now. It’s simple, supply/demand is in favor of the seller. When sellers are in control, the cost to buy is higher and the competition is greater. As we approach the spring market, the demand will only grow higher, and so will prices. If we just use 5% appreciation rates, a $300K home costs $1,250 more in a month from now. A $400K house costs almost $1,700 more each month. How much has waiting cost someone that chose to wait from November until now? $5,000? $10,000? More?

The same case can be made for looking at the choices people have made when it comes to their outstanding debts. The largest overlook people make is the cost of that car they just had to buy! Maybe it’s the cost of two cars? But does the client realize the true cost of that choice? Do they know that at a 7% interest rate that every $100 in car payment reduces the amount of mortgage you can qualify for by more than $15,000? So, when we look at $500, $600, $700 a month or more in car payments, is that choice worth $75,000, $90,000, or over $100,000 in mortgage value? The same holds true for boats, RV’s, campers, credit cards, and other installment debt. Knowing the true cost can be life changing. Providing that information allows your client to understand their choices and how one choice can impact another. It also shows that as a true professional, you are sharing information that allows your client to make informed choices.

What’s the TRUE COST? As we head into the spring market, the demand will grow higher, and so will prices. Are you making sure your clients know the true cost of their choices.? Waiting will definitely cost them more!

WRITTEN BY MICHAEL WHITE

ORIGINAL POST

Monday, March 11, 2024

Sell or Stay Put? 11 Crucial Considerations for Today's Market, According to Real Estate Experts

With the volatility in the housing market over the last few years, many sellers are wondering if now is the right time to sell their house. The rise of home prices has made the market favorable for sellers, but those looking to move for more space or other reasons are struggling to find homes within their budget. Between high interest rates and low inventory keeping prices high, a new home purchase could leave homeowners stuck with a new mortgage payment that’s unsustainable.

Here are 10 key considerations homeowners need to take into account when debating if they should sell or stay put in today’s real estate market.

1. It’s still a seller’s market.

There’s no doubt the current market is working in favor of sellers, making it a much easier decision for those considering downsizing. Rachel Moussa, a Realtor based in Flower Mound, Texas, says low inventory combined with slightly lower interest rates compared to late 2023 has increased buyer demand again, making it a great time to be a seller.

If you have no strong reason to sell right away, Moussa says sellers willing to take a risk may want to wait to list until the summer in case buyer demand skyrockets. “If interest rates decrease as expected, sellers will likely net more in the summer than early spring,” Moussa says.

2. High interest rates mean less competition for buyers.

Interest rates have fallen slightly since fall 2023, but they still remain high enough to discourage many buyers. However, Moussa says these high interest rates are making the current market much easier for buyers to secure the home they want with protective measures like appraisals and inspections since there’s less demand.

If rates fall later in 2024, she says, buyers will see a more competitive market and need to forgo protective measures and compete with higher bids. “If you buy now, you can largely avoid that, and then refinance if and when rates go down.”

3. Don’t buy if you can’t find what you’re looking for.

Buyers may have less competition now, but Moussa discourages buyers from buying now for the sake of lower prices if they’re unable to find the home they’re looking for. Less inventory means fewer options with the features buyers want, so it may be prudent to wait until inventory levels are higher so buyers can find the right home for their family.

4. You can invest in smart home improvements.

If you’re looking to sell your home soon, a few savvy home improvements can drive up the value of your home, netting you a higher return. “The three best returns on investment are fresh neutral paint, flooring, and things to improve curb appeal,” Moussa says.

Michael Belfor, a mortgage banker in California, says homeowners can also increase their home’s value through kitchen and bathroom renovations, or even smaller upgrades like replacing appliances.

Before undergoing any renovation or home improvement project, Moussa recommends working with a local real estate agent to see the low-, mid-, and high-end of neighborhood sales so you don’t overdo it and spend more than what the project will increase in your home’s value.

5. Budget beyond a monthly payment.

Homeowners looking for a new home need to think and budget beyond the sale price and mortgage payments to know if they can afford to move, says Joe Thweatt, a Texas-based loan originator.

“Budget considerations should not only include the monthly payment, but also consider down payment, closing costs, moving costs, and maintenance costs moving forward,” Thweatt says. “Just because you can technically qualify for a loan does not necessarily always mean you should [take out the maximum amount].”

As a budget starting point, Thweatt says homeowners’ overall debt should be at 43 percent or less of their gross income. For example, a household with a monthly income of $10,000 should have no more than $4,300 in total debt payments, including a mortgage, credit cards, or any other debts.

6. You could rent out your home.

To build up funds for your next down payment, Moussa says renting out your current home can be an option. “If homeowners have a low interest rate, they may be surprised at the delta between what they can rent it for and their mortgage payment,” she says.

However, the key to this solution is moving into lower cost housing temporarily until enough savings are established, either by renting or downsizing into a smaller home. This solution is heavily dependent on the local rental market, and Moussa says homeowners should consult with a real estate agent to see if this is a viable financial option.

7. Consider finding a co-signer.

Homeowners with mid to low credit scores, like below 650, may think today’s high interest rates make securing a new mortgage loan impossible. However, if you need to move in the near future without time to work on improving your credit score, Belfor recommends finding a co-signer for the loan. “Having a co-signer with better credit or a joint application with a spouse or family member with stronger finances may help secure a better interest rate,” he says.

8. Establish at least 10 percent equity in your current home.

Homeowners also need to take a look at how much equity they have in their current home before jumping into a new purchase. Experts recommend sellers have at least 10 to 15 percent equity in order to have enough funds to pay off the loan and closing costs. Otherwise, sellers may take a financial loss by selling the home.

9. Be open to more affordable locations.

Homeowners wanting lower housing expenses or more space for the same cost should look into more affordable areas for a new home, says Moussa. “If you need more space, or you need less expense at a time when interest rates are higher than the rate you currently have, you have to ask yourself what you are willing to give up,” Moussa says.

Typically, home prices in suburbs decrease the further you go from the city. Or, buyers with more flexibility can look at homes in different states where the cost of living is more affordable.

10. Explore alternative financing options.

The best thing homeowners can do if they’re struggling to qualify for a good interest rate but need to move is to talk with their lender, Thweatt says. “Rate is certainly important, but it is not more important than the proper loan structure on the proper home. [Your loan adviser] knowing your real, short-, or long-term goals are for the property is paramount,” he says.

Some lenders even specialize in working with borrowers who may not qualify for traditional mortgages. Based on the homebuyer’s goals and financial needs, lenders may suggest different loan structures or alternative financing options, such as a lease-to-own agreement. There are also government loan programs, such as VA or FHA loans, that homebuyers can take advantage of if they meet the qualifications for a mortgage with better terms.

11. It’s best to be patient.

Above all, real estate experts say patience is key to navigate the current market. “I would always recommend giving yourself enough time when buying or selling a home,” Thweatt says. “When you are in too big of a hurry the tendency is to over pay or to settle on a property you do not fully love.”

Delaying the search for even 6 months can be beneficial, whether it’s to work on raising a credit score for a better loan or waiting to avoid a more competitive spring and summer market.

BY: Emily Benda Gaylord

Original Post

 

Wednesday, March 6, 2024

Are There Tax Advantages of Buying a Home?

 

If you’re thinking about becoming a homeowner any time soon, there are tax benefits to buying. In particular, tax deductions are one way to reduce your tax bill and income. Tax deductions are different from credits. Credits are money that gets taken off a tax bill. You can think of them somewhat like a coupon. A tax deduction reduces your adjusted gross income or AGI, reducing your tax liability.

The following are key tax benefits and things to know for homebuyers or possible homebuyers.

Mortgage Interest Deduction

Homeowners can deduct  interest on their home mortgage for the first $750,000 of mortgage debt. That limit is $375,000 if you’re married and filing separately. If you bought your home prior to December 16, 2017, an old limit of $1 million applies, and $500,000 if you’re married but filing separately.

In January, at the tax year’s end, a lender sends you Form 1098. This details the interest you paid over the previous year. You should include the interest you paid as part of the closing too.

Your lender includes interest for the partial initial month of your mortgage as part of your closing. You can locate this on your settlement sheet. If it’s not included on the 1098, add it to your total mortgage interest.

Mortgage Points Deduction

If you paid mortgage points to a lender as part of your loan or refinancing, then each point you buy will generally cost 1% of the total loan. They lower your interest rate by 0.25% each. If you paid, let’s say, $300,000 for your home, every point equals $3,000. If your interest rate is 4% in this example, the one point will lower your rate to 3.75% for the rest of your loan. You would get a deduction if you gave your lender money for your discount points.

If you refinanced your loan or took out a home equity line of credit, you are eligible for a deduction for points for your loan’s life.

Every time you’re making a payment on your mortgage, a smaller percentage of the points is built into your loan, and you can deduct that amount for every month you make payments. Again, your lender sends Form 1098, which details what you paid in interest on your mortgage and mortgage points.

You can claim the deduction based on that information on Schedule A of your Form 1040 or 1040-SR.

Private Mortgage Insurance (PMI)

If you have private mortgage insurance, which lenders usually charge to borrowers who put down less than 20% on a conventional loan, you may be able to deduct your payments. PMI usually costs anywhere from $30 to $70 monthly for every $100,000 borrowed. As with other types of mortgage insurance, PMI protects a lender if you don’t make your mortgage payments.

Whether or not you can deduct PMI payments can depend on when you bought your home and your income.

The IRS says that homeowners can treat what you pay for PMI as interest on a home mortgage. If your adjusted gross income is under $100,000 or $50,000 if married, filing separately, you’re eligible for the full deduction here.

If you’re above that threshold, the deduction is phased out. If your AGI is above $109,000 or $54,500 to file separately as a married person, you aren’t eligible to take the deduction.

State and Local Tax Deduction

The state and local tax deduction, also known as SALT, lets you deduct some taxes you pay to the state or local government, but you have to itemize on your federal return.

Under the Tax Cuts and Jobs Act, there was a cap on previously unlimited deductions. The cap is $10,000 per year in combined property taxes and either state income or sales taxes. The cap applies whether you’re single or married filing jointly. It goes down to $5,000 if you’re married and filing separately.

Home Sale Exclusion

If you profit after selling your home, you may not have to pay taxes. If you’ve owned and then lived in the home for at least two of the five years before the sale, you won’t pay taxes on the initial $250,000 of your profit. This profit is your capital gain. If you're married, filing jointly, that number goes up to $500,000.

However, at least one of the spouses has to meet an ownership requirement. Both spouses must meet a residency requirement, meaning they have lived in the home for two of the past five years.

Tax Credits

Finally, you could qualify for a mortgage credit if you received a mortgage credit certificate or MCC from a state or local government agency under a qualified mortgage credit certification program. You can also see if your state offers rebates, tax credits, or incentives for making improvements to your home to make it more energy efficient.

WRITTEN BY ASHLEY SUTPHIN

Original Post

Tuesday, February 27, 2024

Buying a Home? Don’t Forget to Ask These Questions!

 

Buying a home comes with a lot of responsibilities and liabilities. When you buy a home, you are stuck with it until after you sell it successfully. Because of this, you must take extra precaution and try to ask as many important questions as possible before you close a deal with the seller or broker. Below are the questions you shouldn’t forget to ask when buying a home.

Can You Have a Copy of the Home’s Sales History?

It is important to know about how many times the home has changed hands over the years as well as for much the home sold for each time. This will let you know about your prospective property’s value fluctuations which can help you sell the home and negotiate fairly in the future.

What is the Cost of Monthly and Annual Utility and Maintenance?

No one wants a home that racks up utility bills as though the owners are made of money. The water, power, and gas bills should be disclosed as well as annual maintenance cost for you to gauge if you can truly afford the home.

How Much is the Property Tax?

Although the home’s value is the primary determinant of the property tax, knowing how much the current owners are paying is a good way to determine future expenses on the property.

Does the House Have an Unusual History or Has It Been Involved in Any Crime?

Any history of suicide, murder, or death should be disclosed by the broker or seller. Unusual history like appearing in a magazine, commercial, or movie should be disclosed as well. A home appearing in public media may mean a future privacy breach and a negative history can make a home difficult to sell in the future.

When was the Roof Last Fixed or Replaced?

A roof replacement can cost upwards of $10,000. The future homeowner should know when a huge expense like this may be due.

Does the Area Around the Property Come with Parking Restrictions?

Whether or not the home has a garage, it is possible that future visitors may need to park outside of the property. When this happens, the last thing you want is for your guests’ vehicles to get towed away.

Are There On-Going Warranties for the Kitchen Appliances, Garage Door, the HVAC System, and More?

Replacing any of the above can easily cost thousands of dollars. Having the warranties can save a lot of money down the road.

Are There Renovations or Additions Made by Past and Current Owners?

Upgrades can cost a lot. It is best to know which contractors worked in the house before and what they did more so if planning future additions or renovations.

Are There Any Issues with Sewage or Broken Pipes?

Although you can hire a home inspector, it is best to know these issues beforehand more so that the cost of repairs for issues like this can be equivalent to a sizable amount.

Are There Past or Current Pest Infestations?

Getting rid of rodent or insect infestation can incur a lot of time and money. Something like this needs to be disclosed rather than find out when it is too late.

WRITTEN BY MICHAEL PORTER

Original Post 

Monday, February 26, 2024

Why Are People Buying Houses with Their Friends?

When we think about buying a home, we think about the traditional situations. You might buy a starter home on your own, or you could get married or start a family and then buy a home.

We tend to view homeownership as something we do alone or with a significant other, but there’s a new trend becoming increasingly popular, which is buying a house with your friends.

Millennials are the primary demographic starting mortgages with friends, and they’re often putting off getting married or having kids.

Co-buying houses with friends isn’t necessarily a positive reflection of the state of the housing market, though. Buying a house is increasingly unaffordable, even when it would have been much more attainable a few decades ago.

Why Co-Buying?

There is undoubtedly a housing crisis going on right now, and there is a significant shortage of inventory which isn’t showing signs of getting resolved any time soon. When people try to buy a home, they’re often priced out or beat out in bidding wars.

Millennials creatively solve the economic hurdles that might otherwise block them from homeownership with co-buying.

According to the National Association of Realtors (NAR), the number of buyers purchasing as unmarried couples has been rising throughout the pandemic. During the pandemic, a lot of people re-evaluated their living situation. Renters wanted more space, so they thought rather than getting a roommate and continuing to rent, why not buy.

Even before the pandemic, millennial homebuyers were in a tough situation. Saving for a down payment is difficult, particularly with student loan debt and rising living costs. Then, as soon as millennials got to that peak point where they’d normally be buying a home in 2020, a boom began that led to a historic inventory crisis.

Home prices have reached record highs, and starter homes were the biggest victim in the shortage of properties.

Alternatives to the Traditional Lifestyle

The millennial generation has cultivated a new normal, including waiting to get married and have kids. Marriage and birth rates continue to decline, and this generation isn’t settling down as early or in the way that previous generations did.

Still, homeownership remains important to millennials.

Buying a home on your own isn’t always possible with a single income, and around 40% of adults who aren’t in a couple make less money than their peers.

The solution?

Teaming up with a friend or a roommate to cut the price of a home by half. You can potentially buy a home even when you have less money saved.

You may also be able to cut costs in other ways if you take on a communal living model where you’re sharing household utilities and other living expenses.

The Logistics

If someone is considering co-buying with friends or roommates, economists say you should have a formal agreement that will outline the terms for various scenarios. These scenarios include buying out someone who wants to leave the situation or ending the arrangement altogether.

There are also downsides to buying with a friend or roommate. For example, if one of you has a lower credit score than the other, that will negatively affect your mortgage rates. Your friend can affect your credit score too. For example, if they fall behind on their payments, you’re going to be financially impacted.

There are a lot of details that you’re going to need to talk to a professional about, like inheritance issues and how shares are divided. You may not be comfortable having these conversations with a friend or someone who isn’t a family member or significant other.

Overall, it’s an interesting approach to homeownership at a time when it could otherwise feel unattainable but co-buying also isn’t without pitfalls.

WRITTEN BY ASHLEY SUTPHIN

Original Post

Monday, February 12, 2024

Getting Wall Street out of our houses

 

The Street is a major buyer of single-family housing — driving up prices. Here’s a way to get our houses back.

Friends,

Ask average Americans why they’re grumpy — why, for example, they don’t credit Joe Biden with a good economy — and lack of affordable housing comes high on the list.

An important but little understood reason home prices and rents have skyrocketed across America — causing so many young people, in particular, to feel frustrated with the economy — is Wall Street’s takeover of a growing segment of the housing market.

The biggest reason home prices and rents have soared in the U.S. is the lack of housing. Supply isn’t nearly meeting demand.

But here’s the thing: Americans aren’t just bidding against other Americans for houses. They’re also bidding against Wall Street investors — who account for a large and growing share of home sales.

Democrats in Congress are finally beginning to give this trend the attention it deserves.

Let me explain.

The Street’s appetite for housing began after the 2008 financial crisis, when many homes were in foreclosure — homeowners found they owed more on them than the homes were worth. As you recall, Wall Street created that crisis with excessive and risky lending, too often in the form of mortgages to people unable to pay them when they became due.

When the crisis pushed the economy into deep recession and millions of Americans lost their jobs, many additional homeowners were unable to pay up. They, too, discovered that they owed more on their homes than their homes were then worth.

The Street became a double predator — first causing a housing bubble, which burst. Then buying up many of the remains at fire-sale prices, and selling or renting them for fat profits.

The predation continues. America’s soaring demand for housing has made houses terrific investments — if you’ve got deep enough pockets to buy them.

Partly as a result, homeownership — a cornerstone of generational wealth in the United States, and a big part of the American dream — is increasingly out of reach of a large and growing number of Americans, especially young people.

All over America, hedge funds (in the form of corporations, partnerships, and real estate investment trusts that manage funds pooled from investors) have bought up modestly priced houses, frequently in neighborhoods with large Black and Latino populations, and converted the properties to rentals.

In one neighborhood in east Charlotte, North Carolina, Wall Street-backed investors bought half of the homes that sold in 2021 and 2022. On one block, all but one of the homes sold during these years went for cash to an investor that then rented it out.

By last March (the most recent data available), hedge funds accounted for 27 percent of all single-family home purchases in the United States.

Now for some good news.

Democrats have introduced a bill in both houses of Congress to ban hedge funds from buying and owning single-family homes in the United States.

It would require that these funds sell off all the single-family homes they own over a 10-year period and would eventually bar them from owning any single-family homes at all.

During the decade-long phaseout, the bill would impose stiff tax penalties, with the proceeds reserved for down-payment assistance for individuals and families looking to buy homes from corporate owners.

If signed into law, the legislation could potentially increase the supply of single-family homes available to individual buyers — thereby making housing more affordable.

I have no delusions that the bill will become law anytime soon. But along with many other pieces of legislation Democrats have introduced in this Congress, the bill provides a roadmap of where the country could be heading under the right leadership.

So many Americans I meet these days are cynical about the country. I understand their cynicism. But cynicism can be a self-fulfilling prophesy if it means giving up the fight for a more equitable society.

The captains of American industry and Wall Street would like nothing better than for the rest of us to give up that fight, so they can take it all.

I say we keep fighting. This bill is one reason.

BY: ROBERT REICH

Original Post

Tuesday, February 6, 2024

9 Federal Income Tax Breaks for Homeowners


Some of these deductions and credits are available to a wide swath of homeowners.

Buying and maintaining a home is expensive — and the cost just keeps climbing. Fortunately, Uncle Sam offers several tax breaks that can put more money back in a homeowner’s pocket.

Some of these deductions and credits can only be used by a small slice of homeowners nationwide. But others are available to a wider swath of folks.

Following are federal income tax breaks for homeowners that can ease the sting of homeownership costs.

1. Energy-efficient home improvement credit

If you have made specific energy-efficient improvements to your home, you might qualify for this tax credit. Qualifying expenses can include:
  • Qualified energy efficiency improvements installed during the year
  • Residential energy property expenses (such as new central air conditioners; natural gas, propane or oil water heaters; and natural gas, propane or oil furnaces and hot water boilers)
  • Home energy audits
Through 2032, this credit is worth 30% of the cost of eligible property.

Most of the items we list in this story are tax deductions or exclusions, but this and the next one are tax credits. Credits are better than deductions because, while deductions reduce taxable income, tax credits reduce your tax bill dollar for dollar.

2. Residential clean energy credit

This tax credit is for homeowners who invest in renewable energy. Qualifying expenses can include:
  • Solar electric panels
  • Solar water heaters
  • Wind turbines
  • Geothermal heat pumps
  • Fuel cells
  • Battery storage technology
The residential clean energy credit is available now through 2032 and is worth 30% of the cost of qualifying new clean-energy property.

3. Capital gains exclusion when selling your home

Selling your home opens the door to one of the most generous breaks in the entire U.S. tax code.
Single homeowners who sell and enjoy a capital gain — that is, profit earned from the sale — may qualify to exclude up to $250,000 of that gain from their income. That means they won’t owe federal income taxes on that profit.

If you are married and file a joint return with your spouse, the exclusion jumps to $500,000.
There are some rules you must follow to get this break. According to the IRS:

“You’re eligible for the exclusion if you have owned and used your home as your main home for a period aggregating at least two years out of the five years prior to its date of sale.”

Other rules apply — such as that you generally are ineligible if you excluded the gain from the sale of another home during the two-year period prior to the sale of your current home.
For more, check out this page on the IRS website: IRS Topic No. 701, Sale of Your Home.

4. Net investment income exclusion when selling your home

The net investment income tax, which started in 2013, is a 3.8% tax that generally applies to income such as interest, dividends, capital gains, rental and royalty income, and non-qualified annuities.

Not everyone pays it, though; your income needs to be above a certain threshold, which is currently set at $250,000 for married couples filing jointly.

However, even for those who owe the tax, there is an exception for gains on the sale of a personal home. If such a gain is excluded from your gross income for regular income tax purposes, it also is excluded from your net investment income for the purpose of the 3.8% tax.

5. Exclusion for canceled mortgage debt

Debt forgiveness is a rose that often comes with a thorn — in the form of taxes you owe on the debt that has been canceled. This is because the IRS often considers a canceled debt to be taxable income.

However, passage of the Mortgage Forgiveness Debt Relief Act of 2007 “generally allows taxpayers to exclude income from the discharge of debt on their principal residence,” according to the IRS.

This relief applies to debt reduced through mortgage restructuring and mortgage debt forgiven in connection with a foreclosure. The provision was extended through 2025, and it allows up to $750,000 in forgiven debt to be excluded.

6. Deduction for mortgage interest

This tax break allows you to deduct from your taxes the interest you pay on a mortgage loan.
This break — and all that follow on this list — are what the IRS calls itemized deductions. That means you can take advantage of them only if you itemize your deductions as opposed to taking the standard deduction.

If you took out your loan on or before Dec. 15, 2017, you can deduct interest on a debt of up to $1 million. For homes purchased after that date, only interest applied to loan amounts of up to $750,000 can be deducted.

This deduction applies to interest on mortgages for first and second homes and refinanced mortgages. The IRS defines “home” pretty broadly — it even includes a boat house.

7. Deduction for home equity loan interest

Just as you can deduct the interest from a mortgage loan, if you itemize, you also can deduct the interest on a home equity loan or home equity line of credit.

However, for the interest to be deductible, the loan must be used to “buy, build or substantially improve your home that secures the loan,” according to the IRS.

So, you’re out of luck if you use a home equity loan to cover living expenses or pay off debts, for example.

8. Deduction for real estate property taxes

Those who itemize generally can deduct up to $10,000 of their state and local taxes, including real estate property taxes.


9. Medical expense deduction for home improvements

One last tax break for those who itemize: Some home improvements can be deducted as medical expenses if they meet certain criteria. According to the IRS:

“You can include in medical expenses amounts you pay for special equipment installed in a home, or for improvements, if their main purpose is medical care for you, your spouse, or your dependent.”

Just note that this deduction only applies to the part of your medical and dental expenses that is more than 7.5% of your adjusted gross income. So, even if you itemize, you cannot deduct the full value of your medical expenses.

You can find more details in IRS Publication 502, Medical and Dental Expenses.

BY: Chris Kissell 


 


Thursday, February 1, 2024

Rates Right in Line With Long-Term Lows, But That Could Change on Friday

"Long-term" is a subjective measurement, but in this case, it refers to the the past 7 or 8 months.  Today's mortgage rates dropped to levels that--until 2 other recent days in late December--haven't been seen since May, 2023. In other words, we're effectively at 8 month lows today, even if those lows aren't very different from the lows in late December.

This week's precipitous drop came courtesy of factors other than the slate of economic data.  That's interesting because we'd been eagerly anticipating this week's econ data as a potential source of volatility.  Instead, it was a friendly update from the U.S. Treasury on its borrowing plans (something that can have a big, indirect impact on mortgage rates by altering the supply/demand equation in the Treasury market which then spills over into the mortgage market).

All of the above means that Friday morning's jobs report is our first significant opportunity to see a big move in rates that's driven by economic data.  As is always the case ahead of this report, the reaction could easily take rates quite a bit higher or lower.  It can also thread the needle and keep things fairly flat.  

The market is expecting the job count to drop to 180k from last month's 216k.  A lower number would likely keep low rates intact, and a much lower number would allow for new longer-term lows.  Conversely, a number over 200k would be more likely to put upward pressure on rates.  It's not uncommon for the actual number to come in roughly 100k away from the forecast level.  The farther from forecast, the likely we are to see the big reaction.

By: Matthew Graham

Original Post

 

Friday, January 26, 2024

Lower Mortgage Rates Coax Home Buyers Off the Fence

 

Stabilization in borrowing costs is easing home shoppers’ affordability concerns.

Mortgage rates, which have settled in the 6% range, barely budged this week, giving potential home buyers more confidence to shop for real estate. The 30-year fixed-rate mortgage averaged 6.69%, marking the sixth consecutive week of holding steady, Freddie Mac reports.

“Given this stabilization in rates, potential home buyers with affordability concerns have jumped off the fence and back into the market,” says Sam Khater, Freddie Mac’s chief economist. “Despite persistent inventory challenges, we anticipate a busier spring homebuying season than 2023, with home prices continuing to increase at a steady pace.”

Buyers are already reemerging in the market. Mortgage applications to purchase a home—a gauge of future homebuying activity—are up nearly 8% compared to the week before, the Mortgage Bankers Association reports. “Conventional and FHA purchase applications drove most of the increase last week as some buyers moved to act early this season,” says Joel Kan, an economist at the MBA.

Sales of newly built homes also are on the rise, increasing 8% month over month and 4.4% year over year in December, the Commerce Department reported this week. The construction uptick coincided with drops in mortgage rates at the end of last year. Plus, the latest homebuilder surveys show rising optimism for future sales expectations in the new-home sector, says Alicia Huey, chairperson of the National Association of Home Builders.

“There is no question that 2023 was a rough year in housing, but there are plenty of reasons to see optimism in 2024,” says Jessica Lautz, deputy chief economist at the National Association of REALTORS®. “Lower mortgage interest rates will have buyers and sellers reconsider sitting on the sidelines.”

Freddie Mac reports the following national averages with mortgage rates for the week ending Jan. 25:

30-year fixed-rate mortgages: averaged 6.69%, increasing from last week’s 6.6% average. A year ago, 30-year rates averaged 6.13%.

15-year fixed-rate mortgages: averaged 5.96%, increasing from last week’s 5.76% average. Last year at this time, 15-year rates averaged 5.17%.

bY: Melissa Dittmann Tracey

Original Post

Thursday, January 25, 2024

$250 million in down payment assistance up for grabs for some California home buyers

 

Between 1,700 and 2,000 lucky lottery winners will receive vouchers that they’ll then have 60 days to spend on a home as part of California's Dream for All program.

SACRAMENTO, Calif. — California will dole out $250 million more in down payment assistance to first-time homebuyers this spring, while making changes to its 1-year-old program aimed at reaching a more diverse group of borrowers across the state.

Last year frenzied homebuyers hoovered up nearly all $300 million budgeted for the California Dream for All loan program in just 11 days. While the new program was wildly popular, some realtors and lenders reported that clients who received the funds were already far along in the home purchase process, fueling speculation about whether the loans were going to people who already could afford to buy homes.

The program’s next round, launching today, keeps the same “shared appreciation” lending model: The state will give first-time homebuyers money towards a down payment — up to 20% of the purchase price or $150,000, whichever is lower — then it will get paid back the loan plus a share of the home’s appreciation whenever it sells again.

This time the California Housing Finance Agency, which administers Dream for All, hopes to head off a mad scramble for the loans by replacing its original first-come, first-serve model with a lottery. 

Homebuyers will have until April to find a state-approved lender and start working on an application. A lottery opens in early April, and buyers will have a month to submit their applications. Between 1,700 and 2,000 lucky lottery winners will receive vouchers that they’ll then have 60 days to spend on a home.

More time to prepare

The extra time to prepare should help Californians who may not be sure if they could buy a home without state assistance, said CalHFA spokesperson Eric Johnson. 

The program is for people for whom homeownership “may be a dream but they’ve got the steady income, they’ve got the decent credit score of above 660 and they’re thinking, ‘OK, wow, this could really make the difference,’ ” said Johnson. “This gives them time to get motivated, to find a loan officer. If they need to do a little work on their credit score or change their debt-to-income ratio, they’ve got time to work with one of our loan officers or brokers.”

The agency will set aside a number of vouchers for each region of the state based on its share of the state’s households. That’s to avoid the geographic disparities that emerged in the program’s first round, in which Sacramento County homebuyers disproportionately benefited but those in Los Angeles County, which represents 25% of the state’s population, received just 9% of loans. 

California Dream for All “was initially conceived of as focusing on higher-cost parts of the state where it’s especially hard to use existing down payment programs, and that was not exactly an unequivocal success,” said Adam Briones, CEO of California Community Builders, which advocates for closing the racial wealth gap through homeownership and helped draft the research that inspired the program.

The state’s red-hot housing market means some Californians who might otherwise be able to afford mortgage payments must struggle to save enough for a down payment. About 55% of Californians own their homes, the second-lowest home ownership rate of any state, behind New York.

Who will benefit?

Dream for All’s backers had hoped it would especially benefit members of communities that have experienced redlining or low homeownership rates, such as Black and Latino Californians. A CalMatters analysis of Dream for All’s first round found that its beneficiaries included a higher share of people of color than exists among California’s current homeowners, but they were still whiter than the state’s overall population.

California law prohibits state-sponsored affirmative action, which poses a challenge for officials trying to design a program that tackles historical redlining without explicitly addressing race, Briones said.

California Dream for All’s new rules include a requirement that at least one homebuyer in each transaction be a first-generation homebuyer, defined as someone who has never owned a home and whose parents also did not own a home, or someone who grew up in foster care. The state also has lowered the income eligibility threshold from 150% of the area median income to 120%, a number that ranges from about $95,000 a year in Fresno County to about $215,000 in Santa Clara County. 

The state plans an outreach campaign beginning in February that will focus especially on Southern California and the Central Coast to let potential homebuyers know about the program, Johnson said. It will include flyers in laundromats, text messages and advertisements on Spanish-language radio and in Black newspapers.

Colette Washington, a realtor in Oakland, said that about a quarter of her clients are first-time homebuyers and she tried to encourage them to apply for California Dream for All last year. But most were confused by the program and procrastinated, she said, and the money ran out before any of them successfully applied. 

Buying a house “is probably the biggest financial commitment most average folks will make in a lifetime and so it’s intimidating,” she said. “Fear is paralyzing.”

This time around, she said, “I personally would like to see the people who really need the money get it first.”

How to apply for Dream for All

So far California Dream for All has survived Gov. Newsom’s budget ax, which fell on some of the state’s other housing programs last week, as the governor proposed clawbacks of unspent funds to solve a budget deficit his office projects will reach $38 billion in 2024-25. 

Created in 2022, Dream for All was originally envisioned as a 10-year, $10 billion investment before lawmakers scaled it back last year.

Californians interested in applying for the program can visit the California Dream for All website for updates or join CalHFA’s homebuyer email list. 

Johnson had one other piece of advice for wannabe homeowners in the state: “Most importantly, don’t give up hope. There is a possibility of owning your own home in California.”

CalMatters.org is a nonprofit, nonpartisan media venture explaining California policies and politics.

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Wednesday, January 17, 2024

Mortgage Overlays Explained

 

What’s an Overlay? An Overlay is a mortgage industry term that highlights an additional qualifying requirement(s) beyond what the guidelines issued by Fannie Mae and Freddie Mac. FHA, VA and USDA loans can also have overlays. These guidelines are set forth for several reasons, but one is to provide lenders with mortgage program stability as well as allowing lenders to sell loans, either individually or ‘in bulk.

Think about that for a moment. If there were no secondary market at some point the mortgage company would run out of money to lend. When a lender makes a loan, it draws down some money from its credit line and replenishes that credit line once the loan(s) is sold. This process occurs over and over again. 

Overlays can also be used to target a specific type or class of borrower. To reduce risk, a lender might ask for a greater down payment than is originally required. Let’s look at credit scores as an example. While Fannie might ask for a minimum credit score to be 680 a lender might decide to up the ante a bit and set the minimum score at 700. 

Catering to different groups means catering to a particular market or class of borrower. One lender may continue to stand firm with a 680 score while another decides 700 is better. Many borrowers may not know about this dynamic. This can mean applying for a mortgage at a mortgage company, getting declined and thinking that all lenders are the same and stop their search for a new home. All they really needed to do was to continue shopping for a lender who would approve the very same loan, just without the harsher overlays.

If a lender asks for a 680 score your loan officer will know where to send a loan with a sub-700 FICO. These overlays can be placed on both conventional as well as government-backed mortgages. The government-backed mortgages are those underwritten to FHA, VA and USDA program guidelines. 

Overlays can come and go over time. A lender might set forth a new overlay and then a year later remove it or even enhance it. It’s completely up to the individual lender as long as the loan is approved using established guidelines. What lenders can’t do is weaken guidelines. There are no overlays to drop the minimum score requirement from 680 to 650, for example. Doing so would mean the mortgage didn’t meet program guidelines and the loan could no longer be sold. Overlays help protect the lender while at the same time providing borrowers with additional choices.

Finally, lenders can’t dilute loan program requirements. In other words, lenders can’t apply an overlay to lessen the requirements. Reducing approval requirements means the loan won’t have the minimum features that secondary markets require. If a lender does in fact reduce the requirements the loan can still be made, it’s just that the lender can expect to keep the loan in its own possession for the life of the loan.

WRITTEN BY DAVID REED

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